Thoughts on recent Ninth Circuit and California appellate cases from Professor Shaun Martin at the University of San Diego School of Law.

Sunday, February 20, 2005

Sporn v. Home Depot (Cal. Ct. App. - February 17, 2005)

Home Depot's slogan is: "You can do it. We can help." This description is indeed accurate in this case -- and, here, the "it" is "obtain a massive $930,000 default judgment against us." Plaintiff did indeed obtain such a default judgment here, and Home Depot -- and its counsel -- certainly did offer plenty of help.

Home Depot's conduct is seemingly inexplicable. Home Depot's agent for service of process is served with a copy of the summons and complaint, and it is forwarded to Home Depot's corporate counsel. But no one at Home Depot bothers to respond. So plaintiff obtains a default, and, at the prove-up, obtains a $930,000 judgment. Home Depot responds to this judgment only after plaintiff starts to execute upon it, which is a fair piece too late. So holds Justice Rylaarsdam, who affirms the refusal to vacate the default. Plus, adding insult to injury (plus a little more injury), he sanctions Home Depot and its counsel -- Pillsbury Winthrop attorneys Richard Ruben, Kevin Fong (the chair of Pillsbury's appellate practice department), Ralph Blakeney, and Damon Eisenbray -- for filing a frivolous appeal. Which Justice Rylaarsdam justifies with the following parting shot: "The utter lack of merit renders the appeal frivolous and, combined with the unnecessary attacks directed at plaintiff and his lawyers, calls for an award of sanctions in favor of plaintiff." Ouch.

Beyond the obvious lessons, the only other component of this case that deserves special mention relates to the clearly excessive size of the default judgment entered at the prove-up -- a far-too-common result. Sure, since you've got no one opposing you, it shouldn't be too hard to prevail. But that doesn't mean that the court should entirely abdicate control of the case. It's a prove-up, after all, not merely an "allege-up". Here, plaintiff has filed an entirely piddley case that may well be meritless -- essentially, that some unnamed party stole his identity and that Home Depot compounded the problem by making monthly inquiries about plaintiff to Equifax. Okay, it's a default, so we give plaintiff some leeway, and let him prevail. But no way this case is worth $930,00. Sure, maybe you can allege that you were damaged to this degree, and perhaps even testify to it. But come on. Judges at prove-ups aren't required to -- and shouldn't -- ignore reality. This ain't a $930,00 case. It just isn't.

Of course, it worth that now. Indeed, now, it's worth $930,000 plus sanctions. Thanks, Home Depot. You did indeed help.